After a marathon 9 hour decision meeting, the House Appropriations Committee approved its plan to modify Governor O’ Malley’s proposed FY 2012 budget.  As a part of their plan the House Committee restored funding for education, raised motor vehicle titling and vanity plate fees to generate revenue for transportation, and modified other program reductions and transfers. The Committee also took actions to change retiree health benefits and modify the employee and teacher pension systems.

The Committee took the following actions affecting local governments.

Teacher Pensions – Rejected a Department of Legislative Services (DLS) recommendation to transfer 50 percent of teacher retirement expenses to the local boards of education. However, the Committee did approve charging an administrative fee to local employers (local boards of education, libraries, and community colleges) on whose behalf the State makes retirement payments.  The cost per employee is $163 and it generates $17 million in revenue.

Transportation Trust Fund and Local Roadways – Adopted a proposal to provide a one-time payment of $13.2 million to counties and municipalities, $5 million and $8.2 million respectively, for local roadways.  Motor vehicle titling and vanity tag fees are being increased to provide the funding.  The Committee also adopted a statutory provision to require a five year repayment plan for any future transfers of Transportation Trust Fund (TTF) revenues to the General Fund instead of a constitutional firewall.  Lastly, the Committee adopted DLS’s recommendation to “true up” or reconcile special fund and general funds within the TTF.

Flat Funding at the FY 2012 Level – Rejected a provision in the proposed budget that would have authorized the Governor to flat fund nearly all programs (with the limited exceptions of education, employee retirement, MARBIDCO, and the Rainy Day Fund) at the FY 2012 level for FY 2013 through 2016. MACo had objected to this provision as being overbroad and too long-term.

Assessment Function Shift – Modified the proposal in the Governor’s budget to transfer assessment costs to the counties to shift 50 percent of costs instead of the 90 percent as originally proposed.

Shift of Parole Cost – Rejected a DLS recommendation to require counties to reimburse the Parole Commission for the costs of conducting parole hearings and instead adopted language to implement a pilot program using a video conferencing system to hold local inmate parole hearings.  The following counties have been identified for the pilot: Allegany, Baltimore, Frederick, Prince George’s, and Washington.

Education, K-12 – Restored $58.5 million in education funding by setting the per pupil amount used in the education formulas, including GCEI, at $6,694.  In the Governor’s proposed budget, the per pupil amount was reduced by $150 from $6,749 to $6,599, but GCEI was funded at the full amount.

Education, Children in Nonpublic Residential Placements – Adopted a proposal in the Governor’s budget to require local school systems to pay for a share of costs of children in State custody who are placed in a nonpublic residential placement that provides education for the child.  Local cost is defined as the average amount spent by a county from county and State dollars for the education of a nondisabled child

Community Colleges – Adopted a DLS recommendation to reduce funding for community colleges by freezing the formula percentage at 18.5% of the per student funding amount for FY 2012 and 2013 and pushing out the full phase-in with a formula percentage of 29% until FY 2023.

Maryland Mined Coal – Restored the Maryland Mined Coal Tax Credit

Program Open Space – Rejected a DLS recommendation to direct all transfer tax revenue, which funds Program Open Space (POS) and other land preservation programs, to the General Fund and establish a statutory minimum funding level for all programs of $50 million.  Local governments would receive significantly less POS funding in FY 2013 through FY 2016.

State Forest and Park Reserves – Modified the proposal in the Governor’s budget to repeal the statutory requirement for payment in lieu of taxes for State forest and park reserves and Deep Creek Lake revenues to discontinue the payments only in FY 2012 and 2013 and restore the timber and Deep Creek Lake revenues.

Horse Racing Impact Aid – Adopted a DLS recommendation to delete horse racing impact aid to local jurisdictions, $1.2 million.

Food Service Facility Fees – House adopted language to authorize all county boards of health to establish fees for food service facilities based on actual cost of licensing and conducting related food safety inspections.